State Tax Commission of Missouri
v.) Appeal Number 07-32542
SCOTT SHIPMAN, ASSESSOR,)
ST. CHARLES COUNTY,MISSOURI,)
DECISION AND ORDER
Decision of the St. Charles County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.Hearing Officer finds presumption of correct assessment rebutted. True value in money for the subject property for tax years 2007 and 2008 is set at $187,340, residential assessed value of $35,590.
Complainant appeared pro se.
Respondent appeared by Counsel, Charissa Mayes, Assistant County Counselor.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
Complainant appeals, on the ground of overvaluation, the decision of the St. Charles County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $187,340, assessed value of $35,590, as residential property.The Board reduced the value to $180,000, assessed value of $34,200.Complainant proposed a value of $150,000, assessed value of $28,500 on the Complaint for Review of Assessment.A hearing was conducted on January 9, 2007, at theSt. CharlesCountyAdministrationBuilding,St. Charles,Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant testified in her own behalf and offered into evidence Exhibit A.Exhibit A consisted of (1) a two page statement setting forth Ms. Schlief’s basis for her opinion of value, (2) a copy of a sales comparison grid on sales utilized by Respondent’s appraiser; and (3) photographs of the neighboring property showing debris in the back yard.The Complainant gave her opinion of value at hearing as $170,000.This was based on her review of the valuations placed on the 26 homes on her street.
Respondent placed into evidence the testimony of Ms. Teresa Kruep, appraiser forSt. CharlesCounty.The appraiser testified as to her appraisal of the subject property.The Appraisal Report, Exhibit 1, of Ms. Kruep was received into evidence.Ms. Kruep arrived at an opinion of value for the subject property of $188,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of four properties which she deemed to be comparable to the subject property.
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the St. Charles County Board of Equalization.
2.The subject property is located at3104 Hawk Dr.St. Charles,Missouri.The property is identified by map number 5-0080-5211-00-218.The property consists of .22 of an acre lot improved by a one-story brick, ranch, single-family structure of average quality construction.The house was built in 1978 and appears to be in average condition.The residence has a total of four rooms, which includes two bedrooms, one and a half baths, and contains 1616 square feet of living area.There is an attached two-car garage.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2007, to be $170,000.
5.At the close of evidentiary hearing on January 9, 2008, the Hearing Officer advised Complainant that she had failed to meet her burden of proof and that unless the appeal was dismissed that the valuation of the property would have to be increase to the Assessor’s original value, based on Respondent’s Exhibit 1.Complainant was instructed to write a letter dismissing the appeal.
6.On January 18, having not received a letter from Complainant, the Hearing Officer issued his Order to Permit Voluntary Dismissal, and included a Voluntary Dismissal form to Complainant.On January 29, 2008, the Commission received the signed and dated Voluntary Dismissal.On February 5, 2008, the Commission issued its Order Granting Motion for Dismissal.
7.On February 11, 2008, the Commission received Complainant’s letter stating: “I made a mistake and did not understand what I was signing on the VOLUNTARY DISMISSAL.I would like to proceed (continue) the appeal.”On February 13, 2008, the Hearing Officer issued his Order Vacating Dismissal and reinstated the appeal for Decision and Order on the evidentiary record of the January 9, 2008, hearing.
8.The properties relied upon by Respondent’s appraiser in performing her appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property.
A.The four sale properties were located within a mile of the subject, all being in the subject’s subdivision.
B.Each sale property sold at a time relevant to the tax date of January 1, 2007.The sales occurred in a time period from May, 2005 to August, 2006.
C.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.
9.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.All adjustments were appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.The net adjustments ranged from less than 1% of sales price to 7.6% of sales price.
10.The adjusted sales prices for the comparables calculated to $187,134, $192,632, $186,080 and $190,430, respectively.The appraiser concluded on the value of $188,000, placing equal weight on all four comparables.This indicated value calculated to a value per square foot of $116.41 compared with the sales prices per square foot of living area for the comparables of $112.21, $114.94, $110.18 and $118.80.
11.The appraiser also presented a cost approach to value which concluded on a value of $204,910.
12.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the board and to establish the value of the subject, as of January 1, 2007, to be $188,000.Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor of $187,340 and not for the purpose of raising the assessment above that value.Exhibit 1 met the standard of clear, convincing and cogent evidence to sustain the Assessor’s original value.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.Article X, section 14, Mo. Const. of 1945; Sections 138.430, 138.431, RSMo.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.Section 138.431.4, RSMo.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958).
The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board is accepted as true only until and so long as there is no substantial evidence to the contrary.The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the assessor’s or Board’s valuation is erroneous and what the fair market value should have been placed on the property.Snider, Hermel & Cupples Hesse, supra.
As discussed below, Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment.The evidence offered by Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993).It is the fair market value of the subject property on the valuation date.Hermel, supra.
Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.
Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; See also, Real Estate Valuation in Litigation, J. D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80; Uniform Standards of Professional Appraisal Practice, Glossary;Exhibit 1, p. 4.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974). Complainant’s method of valuation of- comparing the value of her home to values determined by the assessor for 26 homes on her street – is not a methodology accepted for appraisal of property.Respondent’s appraiser presented an opinion of value based upon the cost and sales comparison approaches.
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.Hermel, Cupples-Hesse, Brooks, supra.
The Respondent has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program.There is a presumption in this appeal that the original valuation, which was reduced by the Board of Equalization, was made by a computer, computer-assisted method or a computer program.There was no evidence to rebut the presumption, therefore, in order to sustain the valuation of the subject property at $187,340, appraised value, Respondent’s evidence must come within the guidelines established by the legislature and must clearly and convincingly persuade the Hearing Officer as to the value sought to be sustained.
The statutory guidelines for evidence to meet the standard of clear, convincing and cogent include the following:
(1)The findings of the assessor based on an appraisal of the property by generally accepted appraisal techniques; and
(2) The purchase prices from sales of at least three comparable properties and the address or location thereof.As used in this paragraph, the word comparable means that:
(a)Such sale was closed at a date relevant to the property valuation; and
(b)Such properties are not more than one mile from the site of the disputed property, except where no similar properties exist within one mile of the disputed property, the nearest comparable property shall be used.Such property shall be within five hundred square feet in size of the disputed property, and resemble the disputed property in age, floor plan, number of rooms, and other relevant characteristics.
Section 137.115.1(1) & (2).
Clear, cogent and convincing evidence is that evidence which clearly convinces the trier of fact of the affirmative proposition to be proved.It does not mean that there may not be contrary evidence.Grissum v. Reesman, 505 S.W.2d 81, 85, 86 (Mo. Div. 2, 1974).The quality of proof, to be clear and convincing must be more than a mere preponderance but does not require beyond a reasonable doubt.30 AmJur2d. 345-346, Evidence section 1167.“For evidence to be clear and convincing, it must instantly tilt the scales in the affirmative when weighed against the evidence in opposition and the fact finder’s mind is left with an abiding conviction that the evidence is true.”Matter of O’Brien, 600 S.W.2d 695, 697 (Mo. App. 1980).
Complainant’s Burden of Proof
In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2007.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, at 897.Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P. D. George Co., 77 S.W.3d 645 (Mo. App. E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).The owner of property is generally held competent to testify to its reasonable market value. Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970).The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
Complainant’s opinion of value is based upon comparing the value of her home to the value of other homes on her street and the fact that the property next door had debris in the back yard and the yard is not well kept.No supporting data was presented as to the other 26 properties on the subject street or how Ms. Schlief arrived at her opinion of value of $170,000 from her review.There is not information from which the Hearing Officer can arrive at any alleged loss in value to the subject property from the condition of the yard of the neighboring property.Any such conclusion would rest only upon speculation and conjecture, which will never support an adjustment to value or a conclusion of indicated value.
No probative weight can be given to Ms. Schlief’s opinion of value, as it does not rest upon proper elements and a proper foundation.Complainant’s testimony and Exhibit A fail to meet the required burden of proof for the Complainant to prevail.
Evidence of Increase in Value
In any case in St. Charles County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.Section 138.060, RSMo; 12 CSR 30-3.075.
Respondent Proves Value
Respondent presented substantial and persuasive evidence to rebut the presumption of correct assessment by the Board.Respondent’s evidence met the statutory standard of clear, convincing and cogent to establish a fair market value as of January 1, 2008, to be $187,340 for the subject.Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
The adjustments made the Ms. Kruep were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.The adjustments properly accounted for the various differences between the subject and each comparable and fell within a very narrow and acceptable range.
The assessed valuation for the subject property as determined by the Board of Equalization for St. Charles County for the subject tax day is SET ASIDE and the value as set by the Assessor is AFFIRMED and REINSTATED.
The assessed value for the subject property for tax years 2007 and 2008 is set at $35,590.
The Complainant may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Failure to state specific facts or law upon which the appeal is based will result in summary denial.Section 138.432, RSMo 2000.
If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission and an order to the Collector to release and disburse the impounded taxes.§139.031.3 RSMo.If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the Collector of St. Charles County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED February 26, 2008.
STATE TAX COMMISSION OFMISSOURI
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W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 26thday of February, 2008, to:Donna Schlief, 3104 Hawk Drive, St. Charles, MO 63301, Complainant; Charissa Mayes, Assistant County Counselor, 100 North Third Street, Room 216, St. Charles, MO 63301, Attorney for Respondent; Scott Shipman, Assessor, 201 North Second, Room 247, St. Charles, MO 63301-2870; Amy Gann, Registrar, 100 North Third Street, Suite 206, St. Charles, MO 63301; Michelle McBride, Collector, 201 North Second Street, Room 134, St. Charles, MO 63301.